Chinese firms out in force at Frankfurt

Chinese suppliers and manufacturers have accelerated their presence at the Frankfurt auto show, benefiting from a shift towards electric cars forced on German manufacturers by regulators seeking to curb pollution.

Although the number of exhibitors has dropped to 800 in 2019 from 994 in 2017, Chinese motorists and suppliers now make up the largest foreign contingent, with 79 companies, down from 73.

But China’s greater presence is also due to Europe’s lack of expertise in producing lithium battery cells, an area dominated by Asian suppliers.

Zentgraf said he expected further supply agreements to fall in Europe this year following agreements with BMW and Volkswagen.

Farasis is building a 600m-euro plant in East Germany, near where Chinese rival CATL is building a 1.8 billion-euro battery plant.

German carmakers have been forced to accelerate electrification plans after European Union lawmakers imposed a 37.5% reduction in carbon dioxide emissions between 2021 and 2030 in addition to a 40% reduction in emissions between 2007 and 2021.

Electric cars accounted for only 1.5% of global sales last year, or 1.26 million of the 86 million passenger vehicles sold, JATO Dynamics said.

They estimate it will cost the auto industry a total of € 15.3 billion to comply, assuming a cost of € 60 per gram to reduce CO2 emissions for premium producers and € 40 per gram of CO2 reduction for volume producers./investing